The United States Secretary of State Madeleine Albright, whom UN officials fear has developed a personal obsession with President Saddam, is likely to be enraged by the type of agreement emerging here last night. For she - and many politicians on Capitol Hill - have always defined UN Security Council resolution 687 as a means of destroying the Iraqi president as well as ridding him of chemical, biological and nuclear weapons. Because of its references to human rights, the Americans have argued, the UN's harsh economic sanctions can only end when President Saddam goes.
But the deal which Mr Annan appears to have come up with seems to imply that sanctions would end once the problem of weapons of mass destruction is dealt with. This is a very different interpretation from that of Mrs Albright. In other words, she and President Bill Clinton will no longer be able to maintain sanctions as a method of ridding themselves of President Saddam.
The UN spokesman, Fred Eckhard, arrived to tell us Mr Annan was "on the verge of a breakthrough" to end the Iraqi crisis after three hours of talks with resident Saddam. Mr Eckhard could have been standing above New York's East River, deciding the future of war or peace; which, in a sense, he was.
For if you believed what Mr Annan's spokesman was telling us - and how the Americans must have been driven to distraction as they watched him - then the Iraqi leader had done a deal which will force all the President's soldiers and all the President's men to march back down the hill again, pack up their Stealths and send a large part of their fleet out of the Gulf.
So what was the deal? Mr Annan was meeting again last night with the Iraqi deputy prime minister, Tariq Aziz, to sort out one final detail. In the grim hallways of the Republican Palace in south Baghdad the two men discussed what has come to be called the "time element": exactly when UN sanctions will be lifted. When the arms inspectors complete their work? Or with the downfall of President Saddam (the American version)? Mr Annan seems to have won agreement on the first - which means, if the United States agrees, that the inspectors will be given access to the large pseudo- Habsburg palaces around Iraq.
The palace sites may be visited by the inspectors with other foreign officials present. Furthermore, President Saddam is known to have complained to at least one foreign minister that cameras inside his palaces could be used to watch his meetings and learn of his political decisions; there would have to be rules to prevent this intrusion into the "sovereign" affairs of Iraq.
But is this really the great "breakthrough" that Mr Eckhard promises us? In one off-hand remark to a journalist, he said that Mr Annan would have to "sell" his deal to the Security Council - which suggests that it is far from being cut-and-dried. If the Americans accept the new system of presidential site inspections, are they going to be able to represent their massive military escalation in the Gulf as a political victory - especially when it becomes clear that Saddam has acceded to the UN inspectors in return for his own continued rule?
Last night, threateningly, Mrs Albright responded to news of Mr Annan's negotiations: "It is possible that he will come with something we don't like, in which case we will pursue our national interest."
Under the plan which Mr Annan appears to be defining, the UN would recognise different categories of suspected weapons sites.
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